Tajikistan’s economy is expected to grow by 6 percent in 2016, driven by high levels of public investment. However, the internal and external balances have deteriorated, and macroeconomic vulnerabilities have become increasingly acute.

The GDP growth rate is projected to slow in 2017 before gradually recovering over the medium term, assuming that both macro-economic stability and fiscal sustainability are maintained. Mirroring the projected trends in economy-wide growth, poverty reduction is expected to continue over the medium term, though at a slower pace than in recent years.

Despite regional headwinds, Tajikistan’s economy grew by a robust 6.6 percent, year-on-year (y/y), during the first half of 2016, supported by a substantial increase in public investment, the World Bank report said.

The GDP growth rate is projected to remain broadly stable at 6 percent in 2016, supported by the ongoing expansion of industry, construction and agriculture. On the demand side, consumption is projected to growth remains robust. A fiscal adjustment in the second half of 2016 is expected to improve the government’s budgetary position, though the overall budget deficit (including the externally financed public investment program) is expected to reach 4 percent of GDP.

Poverty reduction is expected to continue, though at a slower pace, and the official poverty rate is expected to fall from 31.3 percent in 2015 to 27.3 percent by 2018.